Stories from the field

One of my favorite business talks is from Yvon Chouinard, the founder/owner of Patagonia, an outdoor clothing manufacturer. Patagonia has been very successful at innovating in the apparel industry but they did it by finding the way to do the right thing at all levels of their business.

As I work with Fundación Paraguaya, travel to branch offices, attend meetings and events one quote comes to mind from this talk: “leading and examined life where you have to question everything you do is a real pain in the ass, let me tell you”. In Patagonia’s case is about causing the least harm to the environment, in microfinance it’s about alleviating poverty and proving that you’re being successful at it.

On the way for a borrower visit. En el camino para visitar a un cliente.

With strong competition in microfinance, institutions need to be good in the finance part to ensure they’re able to continue operating and grow. Now if you really want to be good at alleviating poverty then you really need to be good at many more subjects other than giving loans, having stellar loan officers to do the necessary work and be able to prove it.

How poor are the borrowers? There are many poverty benchmarks but are those significant and representative for any environment and give information on the progress? Here at FP the Ikatu team developed, tested and is now implementing a poverty assessment tool that has a meaning and is representative for the quality of life of the local people taking it. Not only that but it’s also easy to take it so that people can fill it in with little or no assistance in a short time. Women taking these surveys have children, small businesses, jobs and households to take care and cannot spend that much time filling a survey from their lender. I had the chance to witness how they tested the surveys in the first Ikatú event (insert link to blog) and now how it’s being rolled out as a requisite for some loans.

Now you know how poor your borrowers are, but we still don’t have a clue on the impact. The finished survey is only the initial point of the curve, and now what happens? To start, loan officers enter the data of the surveys in a database to enable tracking and keep on doing their normal jobs. At FP the normal job is a lot of work… Just to make sure the groups are doing fine they visit them on a regular basis, one officer told me she was visiting a group with issues once every other week; as groups stabilize and members learn to work with each other they need less attention. Then, they do training on many topics… poverty is not only about money, it’s about hygiene, keeping trash in a separate area and don’t burn it; health, making sure their kids get vaccinations and brush their teeth to keep them healthy and avoid expenses of having them fixed; teamwork, learn to work, support and show gratitude to each other; community participation, it’s a shared responsibility to address issues that affect their neighborhoods such as safety.

Women's Committee training. Capacitación a Comité de Mujeres

If a change takes place for the better they need to know about it and why it worked; this will help reinforce behaviors or practices for other groups. If it didn’t work, they also need to know about it to make sure the practice is discontinued and doesn’t affect other groups. Those changes are registered the next time the superstar loan officers go out to visit the groups, apply the survey again and come back to the office to enter the data into the system after a long day in the heat/cold/rain…

So finally when Fundación Paraguaya is filling in their CERISE survey for Kiva or other funders and go to the question “Does the MFI track changes in poverty levels or economic status of clients over time?” they can answer YES! And going back to Yvon Chouinard’s point… yes, it is indeed a pain to make sure you’re doing the right thing, but it’s worth it and it is absolutely necessary.

Carlos is a Kiva Fellow working with Fundación Paraguaya in Asunción, Paraguay and trying to learn a few words in Guaraní.

Yvon Chouinard’s talk is available through the Stanford Center for Social Innovation or as a podcast through iTunes U. Kiva is implementing the CERISE SPI tool to assess partners social performance. Follow this link for an interesting CERISE study correlating social performance with financial performance.

Add Your Comments

Kiva's Comment Policy

To encourage conversation and build community on Kiva's blogs, we've made commenting accessible and viewable by anyone visiting Kiva. Given this high visibility, we ask that you abide by the following guidelines when posting a comment:

Comments should be relevant to the content of specific blog posts and are not to be used for self-promotion or to advertise or solicit.

Please refrain from using profanity or language that may be seen as degrading or disrespectful.

Commenters are expected to accurately and honestly represent themselves. False identities will not be tolerated.

Kiva reserves the right to remove comments in violation of this policy. See Kiva's Terms of Use Agreement for more information on user-generated content.

Search Fellows Updates

About Kiva Fellows Program

Kiva Fellows are volunteers who maximize Kiva's impact around the world. By working closely with our Field Partners in over 50 countries, they make sure loan dollars go where they're needed most -- while having a few adventures along the way. Learn more >>